The immediate determinants of investment spending are the

Question

Multiple Choice
expected rate of return on capital goods and the real interest rate.
level of saving and the real interest rate.
marginal propensity to consume and the real interest rate.
interest rate and the expected price level.

Answer 1

The correct answer is:

expected rate of return on capital goods and the real interest rate.

These two factors are crucial in determining business investment decisions. The expected rate of return influences how profitable an investment is anticipated to be, while the real interest rate affects the cost of borrowing money for investments.